UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended October 31, 2000

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to__________


                         Commission File Number 1-4146-1




                         NAVISTAR FINANCIAL CORPORATION

             (Exact name of Registrant as specified in its charter)

            Delaware                                    36-2472404
            --------                                    ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

      2850 West Golf Road

    Rolling Meadows, Illinois                              60008
    -------------------------                              -----
(Address of principal executive offices)                 (Zip Code)


 Registrant's telephone number, including area code 847-734-4000

Securities registered pursuant to Section 12(b) of the Act: None
                                                            ----

Securities registered pursuant to Section 12(g) of the Act: None
                                                            ----

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X      No__


As of November 30, 2000, the number of shares  outstanding  of the  registrant's
common stock was 1,600,000.

THE   REGISTRANT  IS  A  WHOLLY-OWNED   SUBSIDIARY  OF  NAVISTAR   INTERNATIONAL
CORPORATION AND MEETS THE CONDITIONS SET FORTH IN GENERAL  INSTRUCTION  I(1) (a)
AND (b) OF FORM  10-K  AND IS  THEREFORE  FILING  THIS  FORM  WITH  THE  REDUCED
DISCLOSURE FORMAT.


<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                                    FORM 10-K

                           Year Ended October 31, 2000

                                      INDEX

                                                                            Page

PART I

Item  1.Business (A).........................................................  1
Item  2.Properties (A).......................................................  1
Item  3.Legal Proceedings....................................................  1
Item  4.Submission of Matters to a Vote of
               Security Holders (A)..........................................  1

PART II

Item  5.Market for the Registrant's Common Equity and
               Related Stockholder Matters...................................  2
Item  6.Selected Financial Data (A)..........................................  2
Item  7.Management's Discussion and Analysis of Financial
               Condition and Results of Operations (A).......................  2
Item  7A.Quantitative and Qualitative Disclosures About Market Risk.......... 10
Item  8.Financial Statements................................................. 11
               Statement of Financial Reporting Responsibility............... 35
               Independent Auditors' Report.................................. 36
               Supplementary Financial Data.................................. 37
Item  9.Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure........................... 40

PART III

Item 10.Directors and Executive Officers of the
               Registrant (A)................................................ 40
Item 11.Executive Compensation (A)........................................... 40
Item 12.Security Ownership of Certain Beneficial Owners
               and Management (A)............................................ 40
Item 13.Certain Relationships and Related
               Transactions (A).............................................. 40

PART IV

Item 14.Exhibits, Financial Statement Schedules and
               Reports on Form 8-K........................................... 40

SIGNATURES- Principal Accounting Officer .................................... 41
                    - Directors.............................................. 42
POWER OF ATTORNEY............................................................ 42
INDEX TO EXHIBITS............................................................E-1

(A)-    Omitted or amended as the  registrant  is a  wholly-owned  subsidiary of
        Navistar International Corporation and meets the conditions set forth in
        General  Instructions  I(1) (a) and (b) of Form 10-K and is,  therefore,
        filing this Form with the reduced disclosure format.


<PAGE>

                                     PART I

Item 1.  Business

         The   registrant,   Navistar   Financial   Corporation   ("NFC"),   was
incorporated   in  Delaware  in  1949  and  is  a  wholly-owned   subsidiary  of
International  Truck and Engine Corporation  ("International").  As used herein,
the "Corporation" refers to Navistar Financial  Corporation and its wholly-owned
subsidiaries unless the context otherwise requires.

         The Corporation is a commercial  financing  organization  that provides
wholesale,  retail and lease financing in the United States for sales of new and
used trucks sold by International and International's  dealers.  The Corporation
also finances  wholesale  accounts and selected  retail  accounts  receivable of
International. Sales of new products (including trailers) of other manufacturers
are also financed  regardless of whether  designed or  customarily  sold for use
with International's truck products.

         On November 30, 2000,  the  Corporation's  Board of Directors  approved
management's plan for the sale of Harco National  Insurance  Company  ("Harco"),
the wholly-owned insurance subsidiary. Harco provides commercial physical damage
and  liability   insurance  coverage  to  International's   dealers  and  retail
customers,  and to the general public through an  independent  insurance  agency
system. As a result of this plan of disposal,  the previously reported financial
statements  have been  restated and the results of operations of Harco have been
reported as Discontinued Operations.


Item 2.  Properties

         The Corporation's  properties  principally  consist of office equipment
and leased office space in Rolling Meadows, Illinois; Duluth, Georgia and Plano,
Texas.  The  office  equipment  owned  and  in use  by  the  Corporation  is not
significant in relation to the total assets of the Corporation.


Item 3.  Legal Proceedings

         There were no material pending legal  proceedings  other than ordinary,
routine litigation incidental to the business of the Corporation.


Item 4.  Submission of Matters to a Vote of Security Holders

         Intentionally   omitted.   See  the  index  page  of  this  Report  for
explanation.


                                     PART II

Item    5.    Market for the Registrant's Common Equity and
              Related Stockholder Matters

         See Note 12 to Consolidated Financial Statements.


Item    6.    Selected Financial Data

         Intentionally   omitted.   See  the  index  page  of  this  Report  for
explanation.


                                       1

<PAGE>



Item    7.        Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

         Certain  statements  under  this  caption,   which  involve  risks  and
uncertainties,  constitute  "forward-looking  statements"  under the  Securities
Reform  Act.  Navistar  Financial   Corporation's   actual  results  may  differ
significantly  from the results  discussed in such  forward-looking  statements.
Factors  that might  cause such a  difference  include,  but are not limited to,
those  discussed under the headings  "Business  Outlook" and  "Quantitative  and
Qualitative Disclosures About Market Risk."

Financing Volume

         Customer  demand  for Class 5  through  8 trucks in fiscal  2000 was 6%
lower  than 1999 and 12% higher  than 1998.  High  liquidity  in the  commercial
financing markets  continued to provide the  Corporation's  customers with other
financing alternatives.

         Financing support provided to retail customers over the last three
        years was as follows:
                                                   2000         1999        1998
                                                   ----         ----        ----
Retail and Lease Financing:                                ($ millions)
Finance market share of new International
   trucks sold in the U.S.                        16.4%        16.4%       16.0%

Purchases of receivables and
   equipment leased to others                    $1,475       $1,526      $1,397

Serviced retail notes and lease
   financing balances (including
   sold notes) at October 31                     $3,296       $3,003      $2,579

         During  fiscal year 2000,  the  Corporation  maintained a 16.4% finance
market  share of new  International  trucks  sold in the U.S.  The  purchase  of
receivables  and  equipment  leased  to  others  declined  3% from  1999  levels
primarily  due to  lower  industry  demand.  During  fiscal  2000  the  serviced
portfolio increased 10% to $3.3 billion.  Purchases of receivables and equipment
leased to others in 1999 grew 9% above  1998 as a result of the  higher  finance
market share and truck industry demand.

         Financing  support  provided to  International's  dealers over the last
        three years was as follows:

                                                   2000          1999       1998
                                                   ----          ----       ----
Wholesale Financing:                                        ($ millions)
Percent of wholesale financing of
   new International trucks sold to
   International's dealers in the U.S.              96%           96%        95%

Purchases of receivables                         $4,119        $4,188     $3,813

Serviced wholesale note balances
   (including sold notes) at
   October 31                                    $1,115        $1,226     $1,039


                                       2
<PAGE>

Item    7.    Management's Discussion and Analysis of
              Financial Condition and Results of Operations (continued)

Financing Volume (continued)

         In spite of the strong  liquidity in the commercial  financing  market,
the  Corporation's  finance  percentage  of new  International  trucks  sold  to
International's  dealers  remained  at 96% in 2000.  The  volume of  receivables
purchased in 2000 was 2% lower than 1999 as industry  demand declined during the
last half of fiscal year 2000.  Receivables purchased increased 10% in 1999 from
1998 levels as dealers increased inventory levels in response to higher demand.

Results from Continuing Operations

         Results from  continuing  operations  over the last three years were as
follows:

                                                   2000          1999       1998
                                                   ----          ----       ----
                                                        ($ millions)
     Revenue                                       $311         $284        $234
     Cost of borrowing                              110           95          88
     Income before taxes                             92           96          79
     Net income                                      56           59          49

     Return on average equity                      18.9%        21.0%      17.1%


         The Corporation's  return on average equity was 18.9% in 2000, compared
with 21.0% and 17.1% in 1999 and 1998, respectively.  The decrease from 1999 was
due  primarily  to lower  gains on sales of retail note  receivables  and higher
losses  on retail  receivables,  offset,  in part,  by  higher  average  finance
receivable balances.  The increase in 1999 over 1998 was due primarily to higher
finance  receivable  balances,  resulting  from an increase  in  International's
sales, and a higher level of average outstanding  accounts payable to affiliates
which proportionately lowered debt levels and interest expense. This was offset,
in part, by a higher  provision  for losses,  higher costs to service the larger
portfolio,  and the competitive  commercial  financing market which continued to
put pressure on retail and wholesale finance margins.

         Retail note  financing  revenue for 2000 was $79 million  compared with
$85 million and $79 million in 1999 and 1998, respectively. The decrease in 2000
is primarily  the result of lower gains on the sale of retail note  receivables.
Gains on the sales of retail note receivables  were $3 million,  $12 million and
$15 million in 2000, 1999 and 1998, respectively.  The lower gains reflect lower
retail note margins and increased  funding rates incurred by the  Corporation in
the asset-backed market.


                                       3
<PAGE>



Item 7.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations (continued)

Results from Continuing Operations (continued)

         Lease  financing  revenue  for 2000 was $94 million  compared  with $76
million  and $57  million  in 1999 and  1998,  respectively.  Included  in lease
financing revenue is operating lease revenue of $75 million, $62 million and $46
million in 2000, 1999 and 1998, respectively. The higher operating lease revenue
is the result of an increase in vehicles under operating  leases due to a market
shift toward lease financing.

         In fiscal  2000  wholesale  note  revenue  increased  3% to $64 million
compared  to  1999,  primarily  as a result  of the  higher  level of  wholesale
financing activity and an increase in the average prime interest rate. Wholesale
note  revenue  increased  45% in 1999 to $63  million  as a result of the higher
level  of  wholesale  financing  activity,  offset  in part by lower  yields  in
response to the lower average prime interest rate.

         Retail and wholesale  account revenue for 2000 was $43 million compared
with $36 million and $33 million in 1999 and 1998, respectively. The increase is
primarily the result of higher  average  balances and an increase in the average
prime interest rate.

         Servicing fee income for 2000 was $31 million compared with $24 million
and $22 million in 1999 and 1998,  respectively.  The increase was primarily the
result of higher average sold receivable balances.

         Borrowing  costs increased 16% in 2000 to $110 million from $95 million
in 1999  primarily due to higher average  receivable  funding  requirements  and
higher  average  interest  rates.  Accounts  payable to affiliates  reduced debt
levels and  resulted in a reduction  in  borrowing  costs of $16 million and $13
million for fiscal years ending 2000 and 1999,  respectively.  The Corporation's
weighted  average  interest rate on all debt was 6.4% in 2000,  5.6% in 1999 and
6.4% in 1998. The increase in the  Corporation's  weighted average interest rate
is primarily a result of the increase in market interest rates.  Borrowing costs
increased  7% in 1999 to $95 million from $88 million in 1998  primarily  due to
higher average receivable funding requirements.  The ratio of debt to equity was
6.2:1, 6.1:1, and 5.8:1 at October 31, 2000, 1999 and 1998, respectively.

         The  provision  for losses on  receivables  totaled $12 million in 2000
compared  with $6 million in 1999 and $1 million in 1998.  The  increase in 2000
compared to 1999 is primarily due to an increase in  repossession  frequency and
pricing pressure in the used truck market. Notes and account write-offs,  net of
recoveries,  including sold notes,  were $12 million in 2000, $5 million in 1999
and less than one million in 1998. The  Corporation's  allowance for losses as a
percentage of serviced  finance  receivables  was .54%, .55% and .64% at October
31, 2000, 1999 and 1998, respectively.

         Depreciation  and other  expenses in 2000 increased to $55 million from
$44  million in 1999 and $30 million in 1998.  The  increase  is  primarily  the
result of a larger investment in equipment under operating leases.


                                       4
<PAGE>



Item 7.       Management's Discussion and Analysis of
              Financial Condition and Results of Operations (continued)

Results from Discontinued Operations

         On November 30, 2000,  the  Corporation's  Board of Directors  approved
management's plan for the sale of Harco National  Insurance  Company  ("Harco"),
the wholly-owned insurance subsidiary. Harco provides commercial physical damage
and  liability   insurance  coverage  to  International's   dealers  and  retail
customers,  and to the general public through an  independent  insurance  agency
system. As a result of this plan of disposal,  the previously reported financial
statements  have been  restated and the results of operations of Harco have been
reported as Discontinued Operations.

         The pretax loss on disposal of Harco is estimated  to be  approximately
$17  million  and  includes  the   estimated   loss  on  sale  of  $12  million,
approximately $4 million of severance and other exit costs, and approximately $1
million of curtailment  loss  associated  with the related  future  reduction of
employees from the Corporation's  postretirement  benefit plans. The anticipated
future  results of operations of Harco  through the date of  disposition  is not
anticipated to be material.  The loss on disposal is reflected net of a deferred
tax  benefit  of  approximately  $6  million in the  Statement  of  Consolidated
Financial Condition.

         Revenues  of Harco were $56  million,  $44  million and $42 million for
fiscal 2000, 1999 and 1998, respectively.

Liquidity and Funds Management

         The  Corporation  has  traditionally  obtained  the  funds  to  provide
financing  to  International's  dealers  and  retail  customers  from  sales  of
receivables,  commercial paper, short and long-term bank borrowings,  medium and
long-term debt and equity capital.  The Corporation's  current debt ratings have
made sales of finance receivables the most economical source of funding.

         In February 2000,  Standard and Poors raised the  Corporation's  senior
debt ratings  from BB+ to BBB-,  while the  subordinated  debt ratings were also
raised  from BB- to BB+.  In May 1999,  Moody's  and Duff and Phelps  raised the
Corporation's   senior  debt  ratings  from  Ba1  and  BBB-  to  Baa3  and  BBB,
respectively,  while also raising the subordinated debt ratings from Ba3 and BB+
to Ba2 and BBB-, respectively.

         Operations  used $322 million of cash in 2000  primarily as a result of
the decrease of $441 million in accounts payable to affiliates. To fund the cash
used for operations,  investing and finance activities  provided $324 million in
cash  during  this  period  primarily  as a  result  of the sale of  retail  and
wholesale  notes  and  proceeds  from long term  debt,  partially  offset by the
purchases of retail notes and lease  receivables.  See also the  "Statements  of
Consolidated Cash Flow" on page 14.


                                       5
<PAGE>



Item 7. Management's Discussion and Analysis of
        Financial Condition and Results of Operations (continued)

Liquidity and Funds Management (continued)

         Over the last three  years,  operations  provided an  aggregate of $411
million in cash, and proceeds from the sale of retail receivables totaled $3,102
million.  These  amounts were used  principally  to fund the purchase of finance
receivables  and  equipment  leased  to  others  of  $4,062,  net  of  principal
collections on the receivables, and to pay dividends of $140 million.

         Receivable  sales were a  significant  source of funding in 2000,  1999
and 1998.  Through the asset-backed  public market and private  placement sales,
the  Corporation  has been able to fund fixed rate  retail note  receivables  at
rates offered to companies with higher  investment grade ratings.  During fiscal
2000, in two separate sales,  the Corporation  sold a total of $1,008 million of
retail notes, net of unearned finance income,  through Navistar Financial Retail
Receivables Corporation ("NFRRC"), a wholly owned subsidiary of the Corporation.
The  Corporation  sold $533  million  of retail  notes in  November  1999 to two
multi-seller  asset-backed  commercial  paper  conduits  sponsored  by  a  major
financial institution and $475 million of retail notes in March 2000 to an owner
trust which,  in turn,  sold notes to investors.  Aggregate  gains of $3 million
were  recognized on the sales.  During fiscal 1999, in two separate  sales,  the
Corporation  sold a total of $1,260  million of retail  notes,  net of  unearned
finance income, through NFRRC. The Corporation sold $545 million of retail notes
in  November  1998  to a  multi-seller  asset-backed  commercial  paper  conduit
sponsored by a major  financial  institution and $715 million of retail notes in
June 1999 to an owner trust which, in turn, issued securities which were sold to
investors.  Aggregate gains of $12 million were recognized on the sales.  During
fiscal 1998, the Corporation sold a total of $1,001 million of retail notes, net
of unearned  finance  income,  through  NFRRC,  to owner trusts,  which in turn,
issued  securities which were sold to investors.  Aggregate gains of $15 million
were  recognized  on the sales.  As of October 31,  2000,  the  aggregate  shelf
registration  available  to NFRRC for  issuance of  asset-backed  securities  is
$1,783 million.  In November 2000, the  Corporation  sold $765 million of retail
notes, net of unearned finance income, through NFRRC to an owner trust which, in
turn,  issued  securities  which were sold to  investors.  A $5 million gain was
recognized on this sale in November 2000.

         At  October  31,  2000,  Navistar  Financial   Securities   Corporation
("NFSC"), a wholly-owned subsidiary of the Corporation, had in place a revolving
wholesale  note trust that funded  $883  million of  eligible  wholesale  notes.
During fiscal 2000, NFSC issued a $212 million tranche of investor  certificates
which mature in June 2005 and sold variable funding certificates with an initial
balance  of  $300  million,   to  a  conduit  sponsored  by  a  major  financial
institution.  The maximum funding capacity of the variable funding  certificates
was reduced to $200  million in July 2000.  As of October 31, 2000 the trust was
comprised of three $200 million  tranches of investor  certificates  maturing in
2003, 2004 and 2008, a $212 million tranche of investor certificates maturing in
2005 and variable funding  certificates  with a balance of $125 million maturing
in 2001.


                                       6
<PAGE>



Item    7.    Management's Discussion and Analysis of
              Financial Condition and Results of Operations (continued)

Liquidity and Funds Management (continued)

         During fiscal 2000, the Corporation  established  Truck Retail Accounts
Corporation  ("TRAC"),  a  special  purpose,   wholly-owned  subsidiary  of  the
Corporation,  for the purpose of  securitizing  retail accounts  receivable.  At
October 31,  2000,  TRAC had in place a revolving  retail  account  conduit that
provides  for the funding of $100  million of eligible  retail  accounts.  As of
October 31, 2000 the Corporation had utilized $80 million of this facility.  The
facility expires in 2001.

         In November 2000, the Corporation  established Truck Engine Receivables
Financing Corporation ("TERFCO"), a special purpose,  wholly-owned subsidiary of
the Corporation,  for the purpose of securitizing engine accounts receivable. On
November  21, 2000,  the  Corporation  securitized  all of its  unsecured  trade
receivables  generated by the sale of diesel  engines and engine  service  parts
from International to Ford. The transaction provides for funding of $100 million
and expires in 2006.

         During  fiscal  2000,  1999 and  1998,  the  Corporation  entered  into
sale/leaseback agreements with third party financiers involving vehicles subject
to retail  finance  leases and operating  leases with end users.  Total proceeds
were  $137  million,  $160  million  and $144  million  in 2000,  1999 and 1998,
respectively. The outstanding capital lease obligations at October 31, 2000 were
$379 million.

         On October 16, 2000 Truck Retail Instalment Paper Corporation ("TRIP"),
a special purpose  wholly-owned  subsidiary of the  Corporation,  terminated the
previously  existing $400 million  Asset-Backed  Commercial  Paper  facility and
issued  $475  million  of  a  senior  class  AAA  rated  and  $25  million  of a
subordinated  class A rated floating rate asset-backed  notes. The proceeds were
used to purchase  eligible  receivables  from the  Corporation  and  establish a
revolving  retail  warehouse  facility  for the  Corporation's  retail notes and
retail leases, other than fair market value leases.

         The Corporation  manages its exposure to fluctuations in interest rates
by limiting  the amount of fixed rate  assets  funded  with  variable  rate debt
generally  by  selling  fixed  rate  receivables  on a fixed  rate  basis and by
utilizing   derivative   financial   instruments.   These  derivative  financial
instruments may include forward contracts, interest rate swaps and interest rate
caps.


                                       7
<PAGE>



Item    7.    Management's Discussion and Analysis of
              Financial Condition and Results of Operations (continued)

Liquidity and Funds Management (continued)

         In November 1998, the Corporation sold fixed rate retail receivables to
a  multi-seller  asset-backed  commercial  paper  conduit  sponsored  by a major
financial institution on a variable rate basis. For the protection of investors,
the  Corporation  issued an interest  rate cap. The  notional  amount of the cap
amortizes based on the expected outstanding principal balance of the sold retail
receivables.  Under the terms of the cap agreement,  the  Corporation  will make
payments if interest rates exceed certain levels. As of October 31, 2000 the cap
had a notional  amount of $224 million and a fair value of $1 million,  which is
recorded  in  other  liabilities  in the  Statement  of  Consolidated  Financial
Condition.

         In November 1999, the Corporation sold fixed rate retail receivables on
a  variable  rate  basis  and  entered  into an  amortizing  interest  rate swap
agreement  to fix the future  cash flows of interest  paid to lenders.  In March
2000, the Corporation  transferred all the rights and obligations of the swap to
the bank conduit.  The notional  amount of the  amortizing  swap is based on the
expected outstanding principal balance of the sold retail receivables. Under the
terms of the agreement,  the Corporation  will make or receive payments based on
the difference  between the transferred swap notional amount and the outstanding
principal balance of the sold retail receivables. The net settlement is included
in retail  notes  revenue.  As of October  31, 2000 the  difference  between the
amortizing swap notional amount and the net outstanding principal balance of the
sold retail receivables was $11 million and had an immaterial fair value.

         Under the revolving retail warehouse  facility,  the Corporation  sells
fixed rate retail  notes or finance  leases to the conduit and pays  investors a
floating rate of interest.  As required by the rating agencies,  the Corporation
purchased an interest  rate cap to protect  investors  against  rising  interest
rates.  To  offset  the  economic  cost of this  cap,  the  Corporation  sold an
identical  interest rate cap. As of October 31, 2000 the interest rate caps each
had a notional amount of $500 million and a net fair value of zero.

         The Corporation  has a $925 million bank revolving  credit facility and
the $500 million revolving retail warehouse  facility  program,  which mature in
March 2001 and October 2005,  respectively.  Subsequent to October 31, 2000, the
Corporation  renegotiated  its  revolving  credit  agreement.  See Note 9 to the
Consolidated  Financial  Statements  for further  discussion.  As of October 31,
2000,  available  funding  under  the bank  revolving  credit  facility  and the
revolving  retail  warehouse  facility  was  $30  million.  When  combined  with
unrestricted cash and cash equivalents,  $72 million remained  available to fund
the general business purposes of the Corporation.


                                       8
<PAGE>



Item    7.    Management's Discussion and Analysis of
              Financial Condition and Results of Operations (continued)

Year 2000

         The  Corporation  had instituted a  corporate-wide  Year 2000 readiness
project to identify all systems, which required modification or replacement, and
to establish appropriate remediation and contingency plans to avoid an impact on
the  Corporation's  ability to continue to provide its  products  and  services.
Through  the  date of this  report,  the  Corporation  has not  experienced  any
significant  Year 2000  problems.  Total costs of the Year 2000  project were $6
million.

New Accounting Standards

         On November 1, 2000,  the  Corporation  adopted  Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities",   as  amended.  This  statement  standardizes  the  accounting  for
derivative  instruments by requiring that an entity recognize all derivatives as
assets or liabilities  in the statement of financial  condition and measure them
at fair value.  When certain criteria are met, it also provides for matching the
timing of gain or loss recognition on the derivative hedging instrument with the
recognition  of (a) the  changes  in the fair  value or cash flows of the hedged
asset or liability attributable to the hedged risk or (b) the earnings effect of
the hedged forecasted transaction. The cumulative transition adjustment recorded
upon adoption was not material.

         In September  2000,  the Financial  Accounting  Standards  Board issued
Statement of Financial  Accounting  Standards No. 140, "Accounting for Transfers
and Servicing of Financial Assets and  Extinguishments of Liabilities" which the
Corporation must adopt for all applicable transactions occurring after March 31,
2001. The Corporation is currently  assessing the impact of this standard on the
Corporation's results of operations, financial condition and cash flows.

Business Outlook

         Retail deliveries of Class 5 through 8 trucks,  including school buses,
in the U.S. in fiscal 2001 is  forecasted  to  decrease  approximately  27% from
2000. The competitive  commercial financing market will continue to put pressure
on the  Corporation's  retail and  wholesale  financing  activity  and  margins.
Increased volatility in the capital markets is likely to put additional pressure
on the funding rates  available to the  Corporation in the  asset-backed  public
market, commercial paper markets and other debt financing markets. Additionally,
high fuel costs may impact the financial strength of the Corporation's customers
and the  Corporation's  ability  to  maintain  the  current  level of  portfolio
quality.


                                       9
<PAGE>



Item    7.    Management's Discussion and Analysis of
              Financial Condition and Results of Operations (continued)

Business Outlook (continued)

         Management  believes that  collections on the  outstanding  receivables
portfolio plus cash available from the  Corporation's  various  funding  sources
will permit Navistar Financial Corporation to meet the financing requirements of
International's dealers and retail customers through 2001 and beyond.

Item     7A.      Quantitative and Qualitative Disclosures About Market Risk

         The Corporation is exposed to market risk primarily due to fluctuations
in interest  rates.  Interest  rate risk arises from the funding of a portion of
the   Corporation's   fixed  rate  receivables  with  floating  rate  debt.  The
Corporation  has managed  exposure to interest rate changes by funding  floating
rate  receivables  with floating rate debt and fixed rate receivables with fixed
rate debt, floating rate debt and equity capital. Management has reduced the net
exposure which results from the funding of fixed rate  receivables with floating
rate debt by generally  selling fixed rate receivables on a fixed rate basis and
by utilizing  derivative  financial  instruments.  The Corporation  does not use
derivative financial instruments for trading purposes.

         The  Corporation  measures its interest rate risk by estimating the net
amount  by which  the fair  value of all  interest  rate  sensitive  assets  and
liabilities,  including derivative financial  instruments,  would be impacted by
selected  hypothetical changes in market interest rates. Assuming a hypothetical
10% increase in interest  rates as of October 31, 2000, the estimated fair value
of the net  assets,  excluding  net  assets of  Discontinued  Operations,  would
decrease by approximately $17 million.


                                       10
<PAGE>


Item 8.  Financial Statements and Supplementary Data                        Page

   Navistar Financial Corporation and Subsidiaries:

     Consolidated Financial Statements:
        Statements of Consolidated Income and Retained Earnings

           for the years ended October 31, 2000, 1999,and 1998................12
        Statements of Comprehensive Income for the years
           ended October 31, 2000, 1999 and 1998..............................12
        Statements of Consolidated Financial Condition as of
           October 31, 2000 and 1999 .........................................13
        Statements of Consolidated Cash Flow for the years ended
           October 31, 2000, 1999 and 1998....................................14
        Notes to Consolidated Financial Statements............................15
     Statement of Financial Reporting Responsibility..........................35
     Independent Auditors' Report.............................................36
     Supplementary Financial Data.............................................37


                                       11
<PAGE>



                 Navistar Financial Corporation and Subsidiaries
             Statements of Consolidated Income and Retained Earnings

                               Millions of Dollars

   For the years ended October 31                   2000       1999      1998
   -----------------------------------------------------------------------------

   Revenues

        Retail notes................................ $79.3      $84.9     $78.5
        Lease financing.............................  93.5       76.4      57.3
        Wholesale notes.............................  64.4       62.8      43.3
        Accounts                                      42.9       35.6      33.3
        Servicing fee income........................  30.7       23.8      21.6
        Marketable securities.......................   0.6        0.4       0.3
                                                    ------     ------    ------
            Total................................... 311.4      283.9     234.3
                                                    ------     ------    ------

   Expenses
        Cost of borrowing:

            Interest expense........................ 104.1       88.6      81.0
            Other...................................   5.8        6.1       7.1
                                                    ------     ------    ------
            Total................................... 109.9       94.7      88.1
        Credit, collection and administrative.......  42.4       42.5      36.1
        Provision for losses on receivables.........  12.1        6.2       0.8
        Depreciation expense and other..............  55.1       44.1      30.1
                                                    ------     ------    ------
            Total................................... 219.5      187.5     155.1
                                                    ------     ------    ------

   Income Before Taxes..............................  91.9       96.4      79.2

   Taxes on Income..................................  35.5       37.1      30.3
                                                    ------     ------    ------

   Income from Continuing Operations................  56.4       59.3      48.9
   Loss on Disposal of Discontinued Operations,

        (net of tax benefit of $6.4) ............... (10.5)       -         -
   Income from Discontinued Operations,

        (net of tax of $(0.1), $(1.8) and $(2.0) )..   0.5        3.2       4.0
                                                    ------     ------    ------
   (Loss) income from Discontinued Operations....... (10.0)       3.2       4.0
                                                    ------     ------    ------
   Net Income                                         46.4       62.5      52.9

   Retained Earnings

        Beginning of year........................... 111.2      109.0     113.1
        Dividends paid.............................. (22.7)     (60.3)    (57.0)
                                                    ------     ------    ------
        End of year.................................$134.9     $111.2    $109.0
                                                    ======     ======    ======

                       Statements of Comprehensive Income

   For the years ended October 31                     2000      1999       1998
   -----------------------------------------------------------------------------
   Net Income                                       $ 46.4    $ 62.5     $ 52.9
   Other comprehensive loss, net of tax:
        Net unrealized losses on marketable secur-
        ities (net of tax of $0.0, $1.9 and $0.7)..    -        (3.2)      (1.2)
        Minimum pension liability adjustment
        (net of tax of $0.2, $0.1 and $0.6)........   (0.3)     (0.2)      (1.0)
                                                    ------    ------    -------
   Other comprehensive loss, net of tax............   (0.3)     (3.4)      (2.2)
                                                    ------    ------    -------
   Comprehensive Income............................ $ 46.1    $ 59.1     $ 50.7
                                                    ======    ======     ======
                 See Notes to Consolidated Financial Statements.


                                       12
<PAGE>



                 Navistar Financial Corporation and Subsidiaries
                 Statements of Consolidated Financial Condition

                               Millions of Dollars

As of October 31                                            2000          1999
--------------------------------------------------------------------------------


ASSETS

Cash and Cash Equivalents.............................   $   41.6      $   39.0
Receivables

     Finance receivables..............................    1,679.0       2,075.9
     Allowance for losses.............................      (12.9)        (13.4)
                                                         --------      --------
         Receivables, net.............................    1,666.1       2,062.5

Amounts Due from Sales of Receivables.................      316.5         244.5
Net Investment in Operating Leases....................      291.1         266.7
Repossessions                                                42.4          21.0
Other Assets                                                112.4          75.5
Net Assets of Discontinued Operations.................       48.8          60.7
                                                         --------      --------

Total Assets                                             $2,518.9      $2,769.9
                                                         ========      ========


LIABILITIES AND SHAREOWNER'S EQUITY

Short-Term Debt.......................................   $      -      $   34.5
Net Accounts Payable to Affiliates....................      266.4         706.9
Other Liabilities.....................................       50.0          48.2
Senior and Subordinated Debt..........................    1,874.0       1,675.8
Dealers' Reserves.....................................       24.1          24.2

Commitments and Contingencies.........................          -             -

Shareowner's Equity

     Capital stock (Par value $1.00, 1,600,000 shares
         issued and outstanding) and paid-in capital        171.0         171.0
   Retained earnings..................................      134.9         111.2
     Accumulated other comprehensive loss.............       (1.5)         (1.9)
                                                         --------      --------
         Total........................................      304.4         280.3
                                                         --------      --------

Total Liabilities and Shareowner's Equity.............   $2,518.9      $2,769.9
                                                         ========      ========


                 See Notes to Consolidated Financial Statements.


                                       13
<PAGE>



                 Navistar Financial Corporation and Subsidiaries
                      Statements of Consolidated Cash Flow

                               Millions of Dollars

For the years ended October 31                         2000      1999      1998
--------------------------------------------------------------------------------

Cash Flow From Operations

     Net income.................................... $  46.4   $  62.5   $  52.9
       Adjustments to reconcile net income to
         cash provided from operations:
        Loss on disposal of discontinued operations
          net of tax...............................    10.5         -         -
       Gains on sales of receivables...............    (2.5)    (11.5)    (15.3)
       Depreciation and amortization...............    56.0      47.1      35.4
       Provision for losses on receivables.........    12.1       6.2       0.8
       (Decrease) increase in accounts payable
         to affiliates.............................  (440.5)    570.1       5.3
       Other                                           (3.7)    (15.6)     (5.1)
                                                    -------   -------   -------
              Total................................  (321.7)    658.8      74.0
                                                    -------   -------   -------

Cash Flow From Investing Activities

     Proceeds from sold retail notes...............   958.0   1,191.6     952.6
     Purchase of retail notes and lease receivables(1,375.9) (1,417.2) (1,262.8)
     Principal collections on retail notes and
         lease receivables.........................   131.1      88.1     116.4
     Proceeds from sold wholesale notes............   282.2         -         -
     Acquisitions under (over) cash collections of
         wholesale notes and accounts receivable...   216.1    (410.3)   (105.8)
     Proceeds from sold retail accounts............    80.0         -         -
     Purchase of equipment leased to others........   (98.6)   (108.7)   (134.2)
     Sale of equipment leased to others............    21.2      15.2       8.9
                                                    -------   -------    ------
              Total................................   214.1    (641.3)   (424.9)
                                                    -------   -------    ------

Cash Flow From Financing Activities

     Net (decrease) increase in short-term debt....   (34.5)     12.7    (119.2)
     Net increase in bank revolving credit
         facility usage............................    55.0      25.0     422.0
     Proceeds from revolving retail warehouse
         facility..................................   414.8         -         -
     Net (decrease) increase in asset-backed
         commercial paper facility usage...........  (358.9)      4.4       6.0
     Principal payments on long-term debt..........   (80.9)   (133.3)    (43.6)
     Proceeds from long-term debt..................   136.9     159.7     144.3
     Dividends paid to International...............   (22.7)    (60.3)    (57.0)
                                                    -------   -------   -------
              Total................................   109.7       8.2     352.5
                                                    -------   -------   -------

Increase in Cash and Cash Equivalents from
     Continuing Operations.........................     2.1      25.7       1.6

Net Cash from Discontinued Operations..............     0.5      (0.6)      0.9

Cash and Cash Equivalents at Beginning of Year.....    39.0      13.9      11.4
                                                    -------   -------   -------

Cash and Cash Equivalents at End of Year........... $  41.6   $  39.0   $  13.9
                                                    =======   =======   =======

Supplementary disclosure of cash flow information:

     Interest paid................................. $ 102.8   $  92.3   $  80.4
     Income taxes paid............................. $  37.8   $  36.5   $  35.3


                 See Notes to Consolidated Financial Statements.


                                       14
<PAGE>




                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED OCTOBER 31, 2000

                               MILLIONS OF DOLLARS

1. SUMMARY OF ACCOUNTING POLICIES

Principles of Consolidation

         The consolidated  financial statements include the accounts of Navistar
Financial  Corporation  and  its  wholly-owned   subsidiaries   ("Corporation").
International   Truck  and  Engine  Corporation   ("International"),   which  is
wholly-owned by Navistar International Corporation  ("Navistar"),  is the parent
company of the Corporation.

Nature of Operations

         The Corporation is a commercial  financing  organization  that provides
retail,  wholesale and lease financing of products sold by International and its
dealers within the United States.

Estimates

         The  preparation of financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

Revenue on Receivables

         Revenue  from  finance  receivables  is  recognized  using the interest
method.  Revenue on operating leases is recognized on a straight-line basis over
the life of the  lease.  Recognition  of revenue is  suspended  when  management
determines the collection of future income is not probable.  Income  recognition
is resumed if collection doubts are removed.

Allowance for Losses on Receivables

         The allowance for losses on receivables is established through a charge
to the provision for losses. The allowance is an estimate of the amount required
to absorb  losses on existing  receivables  that may become  uncollectible.  The
allowance  is  maintained  at an  amount  management  considers  appropriate  in
relation  to the  outstanding  receivables  portfolio  based on such  factors as
overall  portfolio  quality,  historical  loss  experience and current  economic
conditions.


                                       15
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

1. SUMMARY OF ACCOUNTING POLICIES (continued)


Allowance for Losses on Receivables (continued)

         Under various  agreements,  International and its dealers may be liable
for a  portion  of  customer  losses  or  may  be  required  to  repurchase  the
repossessed  collateral at the receivable  principal  value.  The  Corporation's
losses are net of these  benefits.  Receivables are charged off to the allowance
for losses when the receivable is determined to be uncollectible.

Receivable Sales

         The Corporation securitizes and sells receivables to public and private
investors  with  limited  recourse.  The  Corporation  continues  to service the
receivables, for which a servicing fee is received. Servicing fees are earned on
a level  yield  basis over the terms of the  related  sold  receivables  and are
included in servicing fee income.  Gains or losses on sales of  receivables  are
credited or charged to financing revenue in the period in which the sales occur.
An adequate  allowance  for credit  losses is provided  prior to the  receivable
sale.

Income Taxes

         Navistar and its  subsidiaries  file a consolidated  federal income tax
return, which includes  International and the Corporation.  Federal income taxes
for the Corporation are computed on a separate consolidated return basis and are
payable to International.

Cash and Cash Equivalents

         Cash and cash  equivalents  include  money market funds and  marketable
securities with original maturities of three months or less.

Derivative Financial Instruments

         All  derivative  financial  instruments,  such  as  forward  contracts,
interest  rate swaps and interest  rate caps,  are held for purposes  other than
trading.  The  Corporation's  policy  prohibits the use of derivative  financial
instruments for speculative purposes.  The Corporation generally uses derivative
financial instruments to reduce its exposure to interest rate volatility.

         The  Corporation  may use forward  contracts to hedge  future  interest
payments  on  the  notes  and  certificates  related  to  an  expected  sale  of
receivables.  The principal  balance of  receivables  expected to be sold by the
Corporation equals or exceeds the notional amount of open forward contracts. The
Corporation  may use  interest  rate swaps to reduce  exposure to interest  rate
changes when it sells fixed rate receivables on a variable rate basis.  Gains or
losses  incurred  with the closing of forward  contracts and interest rate swaps
are included in the net gain or loss on sale of receivables.


                                       16
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

1. SUMMARY OF ACCOUNTING POLICIES (continued)


Derivative Financial Instruments (continued)

         For the  protection of  investors,  the  Corporation  may enter into an
interest rate cap when fixed rate receivables are sold on a variable rate basis.
The  Corporation  will make  payments  under the  terms of the  written  caps if
interest  rates exceed  certain  levels.  The interest rate caps are recorded at
fair value with subsequent changes in fair value recognized in income.

New Accounting Standards

     On  November  1, 2000,  the  Corporation  adopted  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities",   as  amended.  This  statement  standardizes  the  accounting  for
derivative  instruments by requiring that an entity recognize all derivatives as
assets or liabilities  in the statement of financial  condition and measure them
at fair value.  When certain criteria are met, it also provides for matching the
timing of gain or loss recognition on the derivative hedging instrument with the
recognition  of (a) the  changes  in the fair  value or cash flows of the hedged
asset or liability attributable to the hedged risk or (b) the earnings effect of
the hedged forecasted transaction. The cumulative transition adjustment recorded
upon adoption was not material.

     In  September  2000,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards No. 140, "Accounting for Transfers
and Servicing of Financial Assets and  Extinguishments of Liabilities" which the
Corporation must adopt for all applicable transactions occurring after March 31,
2001. The Corporation is currently  assessing the impact of this standard on the
Corporation's results of operations, financial condition and cash flows.

Reclassification

         Certain prior year amounts have been  reclassified  to conform with the
presentation used in the 2000 financial statements.


                                       17
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

2. TRANSACTIONS WITH AFFILIATED COMPANIES

Wholesale Notes, Wholesale Accounts and Retail Accounts

         In  accordance   with  the  agreements   between  the  Corporation  and
International  relating to financing of wholesale notes,  wholesale accounts and
retail accounts,  the Corporation receives interest income from International at
agreed upon  interest  rates  applied to the average  outstanding  balances less
interest amounts paid by dealers on wholesale notes and wholesale accounts.  The
Corporation  purchases  wholesale notes and accounts from  International  at the
principal amount of the receivables.  Revenue  collected from  International was
$85.6 in 2000, $71.5 in 1999 and $67.2 in 1998.

Retail Notes and Lease Financing

         In   accordance   with   agreements   between   the   Corporation   and
International,  International  may be liable for  certain  losses on the finance
receivables and may be required to repurchase the repossessed  collateral at the
receivable principal value. Losses recorded by International were $22.5 in 2000,
$3.5 in 1999 and $10.7 in 1998.

Support Agreements

         Under provisions of certain public and private financing  arrangements,
agreements  with  International  and  Navistar  provide  that the  Corporation's
consolidated  income before interest expense and income taxes will be maintained
at  not  less  than  125%  of  its  consolidated  interest  expense.  No  income
maintenance  payments were required  during the three-year  period ended October
31, 2000.

Administrative Expenses

         The  Corporation  pays a fee to  International  for data processing and
other  administrative  services based on the actual cost of services  performed.
The amount of the fee was $3.0 in 2000 and $2.6 in 1999 and 1998.

Accounts Payable

         Accounts  payable to affiliates,  which are obligated to be repaid upon
request,  were $266.4,  $706.9,  and $136.8 at October 31, 2000, 1999, and 1998,
respectively. Accounts payable to affiliates reduced debt levels and resulted in
a  reduction  in  borrowing  costs of $15.9 for fiscal 2000 and $12.5 for fiscal
1999. The reduction in borrowing costs for fiscal 1998 was not material.


                                       18
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

3.  DISCONTINUED OPERATIONS

         On November 30, 2000,  the  Corporation's  Board of Directors  approved
management's plan for the sale of Harco National  Insurance  Company  ("Harco"),
the wholly-owned insurance subsidiary.

         Harco  provides  commercial  physical  damage and  liability  insurance
coverage to  International's  dealers and retail  customers,  and to the general
public through an independent insurance agency system. Harco generates its funds
through internal operations and has no external  borrowings.  Insurance premiums
written by Harco are earned on a pro rata basis over the terms of the  policies.
Commission  costs and premium taxes incurred in acquiring  business are deferred
and  amortized on the same basis as related  premiums are earned.  The liability
for  unpaid  insurance  claims  includes  provisions  for  reported  claims  and
estimates of unreported claims based on past experience. Such provisions include
an estimate of loss  adjustment  expense.  The  estimated  liability  for unpaid
insurance claims is regularly reviewed and updated.  Any change in such estimate
is reflected in current operations. Harco limits its exposure on any single loss
occurrence by ceding reinsurance to other insurance enterprises.

         The  Harco  insurance  segment  is  accounted  for  as  a  discontinued
operation and, accordingly  amounts in the consolidated financial statements and
notes thereto for all periods  shown have been restated to reflect  discontinued
operations  accounting.  The net  assets  of Harco  have been  reflected  on the
consolidated  balance  sheet  at  net  realizable  value  and  consisted  of the
following at October 31:

                                                           2000          1999


Marketable securities, at fair value................     $110.4        $101.7

Reinsurance receivables.............................       27.0          23.7

Other assets........................................       17.8          16.6
                                                         ------        ------

  Total assets......................................      155.2         142.0



Insurance reserves and unearned premiums............       90.6          77.9

Other liabilities...................................        3.9           3.4
                                                         ------        ------

  Total liabilities.................................       94.5          81.3
                                                         ------        ------



Net assets..........................................      60.7          60.7

Adjustment to net realized value....................     (11.9)            -
                                                         ------        ------



Net assets of discontinued operations...............     $ 48.8        $ 60.7
                                                         ======        ======

                                       19
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

3.  DISCONTINUED OPERATIONS (continued)


         The pretax loss on disposal of Harco is estimated  to be  approximately
$16.9 and includes the estimated  loss on sale of $11.9,  approximately  $3.8 of
severance and other exit costs, and $1.2 of curtailment loss associated with the
related  future  reduction of employees  from the  Corporation's  postretirement
benefit plans. The anticipated future results of operations of Harco through the
date of disposition is not  anticipated to be material.  The loss on disposal is
reflected net of a deferred tax benefit of $6.4 in the Statement of Consolidated
Income.

         Revenues of Harco were $55.9, $44.2 and $41.6 for fiscal 2000, 1999 and
1998, respectively.



4. FINANCE RECEIVABLES

         Finance receivable balances, net of unearned finance income, at October
31 are summarized as follows:

                                                           2000          1999
-----------------------------------------------------------------------------
Retail notes                                           $1,050.5        $851.9

Lease financing.....................................      223.7         187.8

Wholesale notes.....................................       82.3         528.7

Accounts:
     Retail                                               249.6         437.7
     Wholesale......................................       72.9          69.8
                                                           ----          ----
         Total......................................      322.5         507.5
                                                          -----         -----
              Total finance receivables.............   $1,679.0      $2,075.9
                                                       ========      ========

                                       20
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

4. FINANCE RECEIVABLES (continued)


         Contractual   maturities  of  finance  receivables  including  unearned
finance income at October 31, 2000, are summarized as follows:

<TABLE>
<CAPTION>
                                                   Retail           Lease           Wholesale        Accounts
----------------------------------------------- -------------- ----------------- ---------------- ---------------

Due in fiscal year:
<S>                                                  <C>              <C>               <C>            <C>
    2001   ....................................    $  305.4         $  65.5           $ 64.4         $ 322.5
    2002   ....................................       277.2            61.4             17.9               -
    2003   ....................................       246.3            54.3                -               -
    2004   ....................................       201.9            42.4                -               -
    2005   ....................................       150.1            31.5                -               -
Due after 2005.................................        36.1             8.2                -               -
                                                   --------         -------           ------         -------
       Gross finance receivables...............     1,217.0           263.3             82.3           322.5
Unearned finance income........................       166.5            39.6                -               -
                                                   --------         -------           ------         -------
       Total finance receivables...............    $1,050.5         $ 223.7           $ 82.3         $ 322.5
                                                   ========         =======           ======         =======
</TABLE>

         The actual cash collections from finance  receivables may vary from the
contractual cash flows because of sales,  prepayments,  extensions and renewals.
The contractual maturities,  therefore,  should not be regarded as a forecast of
future collections.

         The Corporation's primary business is to provide wholesale,  retail and
lease   financing   for  new  and  used   trucks  sold  by   International   and
International's  dealers,  and as a result,  the  Corporation's  receivables and
leases have significant  concentration in the trucking industry. On a geographic
basis, there is not a disproportionate  concentration of credit risk in any area
of the United States. The Corporation  retains as collateral a security interest
in the equipment associated with wholesale notes, retail notes and leases.

         The  Corporation  sells  finance  receivables  to  public  and  private
investors  with  limited  recourse   provisions.   Outstanding  sold  receivable
balances, net of unearned finance income, at October 31 are as follows:

                                                     2000                1999
------------------------------------------------------------------------------

Retail notes............................         $1,730.2            $1,696.0
Wholesale notes.........................            883.0               600.0
Retail accounts.........................             80.0                   -
                                                     ----                ----
     Total..............................         $2,693.2            $2,296.0
                                                 ========            ========


         The Corporation has three wholly-owned subsidiaries, Navistar Financial
Retail  Receivables   Corporation   ("NFRRC"),   Navistar  Financial  Securities
Corporation ("NFSC") and Truck Retail Account Corporation ("TRAC"), which have a
limited  purpose  of  purchasing  retail,  wholesale  and  account  receivables,
respectively,   and  transferring  an  undivided   ownership  interest  in  such
receivables to investors.


                                       21
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

4. FINANCE RECEIVABLES (continued)


         During fiscal 2000, in two separate sales, the Corporation sold a total
of $1,008 of retail notes,  net of unearned  finance income,  through NFRRC. The
Corporation  sold $533.3 of retail  notes in November  1999 to two  multi-seller
asset-backed   commercial   paper  conduits   sponsored  by  a  major  financial
institution and $475.0 of retail notes in March 2000 to an owner trust which, in
turn,  sold notes to investors.  Aggregate  gains of $2.5 were recognized on the
sales.  As of October 31, 2000, the aggregate  shelf  registration  available to
NFRRC for issuance of asset-backed securities is $1,782.6.

         At October 31, 2000, NFSC has in place a revolving wholesale note trust
that  provides  for the funding of $883.0 of eligible  wholesale  notes.  During
fiscal 2000, NFSC issued a $212.0 tranche of investor  certificates which mature
in June 2005 and NFSC sold variable funding certificates with an initial balance
of $300.0, to a conduit sponsored by a major financial institution.  The maximum
funding  capacity  of the  variable  funding  certificates  was  reduced to $200
million in July 2000.  As of October  31, 2000 the trust is  comprised  of three
$200.0  tranches of investor  certificates  maturing in 2003,  2004 and 2008,  a
$212.0 tranche of investor  certificates  maturing in 2005 and variable  funding
certificates with a balance of $125.0 which mature in 2001.

         TRAC has in place a revolving  retail account conduit that provides for
the funding of $100.0 of eligible  retail  accounts.  As of October 31, 2000 the
Corporation has utilized $80.0 of this facility. The facility expires in 2001.

         NFRRC,  NFSC and TRAC have limited recourse on the sold receivables and
their  assets are  available to satisfy the claims of their  creditors  prior to
such  assets  becoming  available  for their own uses or to the  Corporation  or
affiliated  companies.  The terms of  receivable  sales  generally  require  the
Corporation  to maintain  cash  reserves  with the trusts and conduits as credit
enhancement.  The use of  cash  reserves  held by the  trusts  and  conduits  is
restricted  under the terms of the  securitized  sales  agreements.  The maximum
exposure under all receivable  sale recourse  provisions at October 31, 2000 was
$329.8;  however,  management  believes  the  recorded  reserves  for losses are
adequate.

         The  following  is a summary of amounts  included  in Amounts  Due from
Sales of Receivables as of October 31:

                                                              2000         1999
--------------------------------------------------------------------------------

Cash held and invested by trusts............................$136.6       $111.6
Subordinated retained interests in wholesale receivables.... 142.5         96.8
Subordinated retained interests in retail receivables.......  50.6         41.4
Interest only receivables...................................   0.1          7.5
Allowance for credit losses................................. (13.3)       (12.8)
                                                            ------       ------
     Total..................................................$316.5       $244.5
                                                            ======       ======

                                       22
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

5. INVESTMENT IN OPERATING LEASES

         Operating leases at year-end were as follows:

                                                             2000         1999

Investment in operating leases:
   Vehicles and other equipment, at cost....................$409.7       $353.7
   Less:  Accumulated depreciation..........................(118.6)       (87.0)
                                                            ------       ------
      Net investment in operating leases....................$291.1       $266.7
                                                            ======       ======


         Future minimum rentals on operating leases are as follows: 2001, $84.5;
2002, $71.6; 2003, $57.8; 2004, $40.0; 2005, $16.9; and $6.7 thereafter. Each of
these assets is depreciated on a straight-line  basis over the term of the lease
in an amount  necessary to reduce the leased  vehicle to its estimated  residual
value at the end of the lease term.

6. ALLOWANCE FOR LOSSES

         The allowance for losses on receivables is summarized as follows:

                                                         2000      1999     1998
--------------------------------------------------------------------------------
Total allowance for losses at beginning of year........ $26.2     $25.4    $24.5
Provision for losses...................................  12.1       6.2      0.8
Net (losses) recoveries (charged)
     credited to allowance............................. (12.1)     (5.4)     0.1
                                                       ------     ------    ----
         Total allowance for losses at end of year..... $26.2     $26.2    $25.4
                                                        =====     =====    =====

Allowance pertaining to:
     Owned notes....................................... $12.9     $13.4    $12.8
     Sold notes........................................  13.3      12.8     12.6
                                                        -----     -----    -----
         Total......................................... $26.2     $26.2    $25.4
                                                        =====     =====    =====

                                       23
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

7. TAXES ON INCOME

         Taxes on income are summarized as follows:

                                                         2000      1999     1998
--------------------------------------------------------------------------------
Current:
     Federal........................................... $26.9     $30.6    $24.7
     State and local...................................   4.5       4.9      3.3
                                                        -----     -----    -----
         Total current.................................  31.4      35.5     28.0

Deferred (primarily Federal)...........................  (2.2)      3.4      4.3
                                                        -----     -----     ----
         Sub-total.....................................  29.2      38.9     32.3
                                                        -----     -----    -----
Less amount from Discontinued Operations                 (6.3)      1.8      2.0
                                                        -----     -----    -----
         Total......................................... $35.5     $37.1    $30.3
                                                        =====     =====    =====

         The effective tax rate of approximately  38% in each of the three years
ended October 31, 2000 differs from the statutory United States Federal tax rate
of 35% primarily  because of state and local income taxes.  The net deferred tax
liability  from  continuing  operations is included in other  liabilities on the
Statements of Financial  Condition.  Net deferred tax assets of $1.6 and $1.9 at
October  31,  2000 and 1999,  respectively,  are  included  in net  assets  from
discontinued  operations on the Statements of Consolidated  Financial Condition.
Deferred tax assets and liabilities at October 31 comprised the following:

                                                             2000           1999
--------------------------------------------------------------------------------
Deferred tax assets:
     Other postretirement benefits.....................    $ 3.6           $ 3.1
     Loss on disposal of discontinued operations.......      6.4               -
     Unrealized losses on marketable securities........        -             0.4
                                                           -----           -----
         Total deferred tax assets.....................     10.0             3.5
Deferred tax liabilities:
     Depreciation and other............................     13.8             9.2
     Unrealized gains on marketable securities.........      0.3               -
                                                           -----           -----
         Total deferred tax liabilities................     14.1             9.2
                                                           -----           -----
         Net deferred tax liabilities..................    $ 4.1           $ 5.7
                                                           =====           =====

                                       24
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

8. SHORT-TERM DEBT

         Commercial  paper is issued by the Corporation  with varying terms. The
Corporation also has short-term borrowings with various banks on a non-committed
basis.  Compensating  cash balances and  commitment  fees are not required under
these agreements.  Unused  commitments  under the  Corporation's  bank revolving
credit facility are used as backup for outstanding  short-term  borrowings.  See
also Note 9 to the Consolidated Financial Statements.

         Information regarding short-term debt is as follows:

                                                        2000      1999      1998
--------------------------------------------------------------------------------
Aggregate obligations outstanding:
     Daily average..................................... $ 2.6    $16.6    $106.1
     Maximum month-end balance.........................  25.0     50.8     148.8
     At October 31.....................................   -       34.5      21.8

Weighted average interest rate:

     On average daily borrowing........................  5.9%     5.7%      6.1%
     At October 31.....................................  N/A      5.7%      6.1%


9. SENIOR AND SUBORDINATED DEBT

         Senior and subordinated debt outstanding at October 31 is summarized as
follows:

                                                           2000            1999
--------------------------------------------------------------------------------

Bank revolving credit facility, at variable
     rates, due March 2001............................. $ 895.0         $ 840.0

Funding under asset-backed commercial
     paper program ("ABCP"), at variable
     rates, terminated October 2000....................       -           412.7

Funding under revolving retail warehouse facility,
     at variable rates, due October 2005...............   500.0               -

Capital lease obligations, 4.11% to 6.71%,
     due serially through 2007.........................   379.0           323.1

Senior Subordinated Notes, 9%, due June 2002...........   100.0           100.0
                                                          ------          -----
              Total senior and subordinated debt....... $1,874.0       $1,675.8
                                                        ========       ========

                                       25
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

9. SENIOR AND SUBORDINATED DEBT (continued)


         The weighted average interest rate on total debt,  including short-term
debt and the effect of  discounts  and related  amortization,  was 6.4% in 2000,
5.6% in 1999 and 6.4% in 1998.  The  aggregate  annual  maturities  and required
payments of senior and subordinated debt are as follows:

       Fiscal year ended October 31

       2001..............................................$1,004.1
       2002..............................................   197.8
       2003..............................................    98.5
       2004..............................................    50.3
       2005..............................................   521.5
       2006 and thereafter...............................     1.8
                                                         --------
          Total..........................................$1,874.0
                                                         ========


         On October 16, 2000 Truck Retail Instalment Paper Corporation ("TRIP"),
a special purpose  wholly-owned  subsidiary of the  Corporation,  terminated the
previously existing $400 Asset-Backed  Commercial Paper facility and issued $475
of a senior  class AAA rated and $25 of a  subordinated  class A rated  floating
rate asset-backed notes. The proceeds were used to purchase eligible receivables
from the Corporation and establish a revolving retail warehouse facility for the
Corporation's  retail  notes and retail  leases,  other than fair  market  value
leases.

         At October 31, 2000, the Corporation had a $925 contractually committed
bank revolving credit facility.  Subsequent to October 31, 2000, the Corporation
renegotiated  its revolving  credit  agreement.  The new agreement  provides for
aggregate  borrowings  of $820 and will mature in November  2005.  Under the new
revolving credit agreement,  Navistar's three Mexican finance  subsidiaries will
be permitted to borrow up to $100 in the aggregate,  which will be guaranteed by
the Corporation.

         Available  funding  under the bank  revolving  credit  facility and the
revolving  retail  warehouse  facility was $30. When combined with  unrestricted
cash and cash  equivalents,  $72 was  available  to fund  the  general  business
purposes of the  Corporation  at October 31,  2000.  Under the terms of the bank
revolving credit facility,  the Corporation is required to maintain tangible net
worth at a minimum of $175 and a debt to tangible  net worth ratio of no greater
than 7 to 1. The bank revolving credit  agreement  grants security  interests in
substantially all of the Corporation's assets to the Corporation's debt holders.
Compensating  cash  balances are not required  under the bank  revolving  credit
facility. Facility fees are paid quarterly regardless of usage.


                                       26
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

9. SENIOR AND SUBORDINATED DEBT (continued)


         During   fiscal   2000  and  1999,   the   Corporation   entered   into
sale/leaseback  agreements  involving  vehicles  subject to retail  finance  and
operating  leases with end users.  The balances are classified  under senior and
subordinated debt as capital lease obligations.  In connection with the sale and
leaseback of certain of its leasing  portfolio  assets,  the Corporation and its
subsidiary,  Harco Leasing,  Inc.  ("HLC"),  have  established  Navistar Leasing
Company  ("NLC"),  a Delaware  business  trust.  NLC holds legal title to leased
vehicles  and is the  lessor  on  substantially  all  leases  originated  by the
Corporation.  The assets of NLC have been and will continue to be allocated into
various  beneficial  interests  issued  by NLC.  HLC owns  one  such  beneficial
interest in NLC and HLC has transferred other beneficial interests issued by NLC
to purchasers under sale/leaseback agreements.  Neither the beneficial interests
held by purchasers  under  sale/leaseback  agreements or the assets  represented
thereby,  nor legal  interest in any assets of NLC,  are  available  to HLC, the
Corporation or its creditors.



10. POSTRETIREMENT BENEFITS

         The  Corporation  provides  postretirement  benefits  to a  substantial
number of its employees.  Costs associated with postretirement  benefits include
pension and  postretirement  health care  expenses for  employees,  retirees and
surviving spouses and dependents.

         Generally,  the pension plans are  non-contributory.  The Corporation's
policy is to fund its pension plans in accordance with applicable  United States
government regulations.  At October 31, 2000, all legal funding requirements had
been met.

Postretirement Expense

         Net periodic  benefit cost included in the  Statements of  Consolidated
Income is composed of the following:

                                    Pension Benefits          Other Benefits

                                ------------------------  ----------------------
                                  2000    1999     1998   2000    1999     1998
--------------------------------------------------------  ----------------------

Service cost for benefits
     earned during the period...$ 0.7   $ 0.7    $ 1.0    $0.4   $ 0.3    $ 0.4
Interest cost on obligation.....  3.7     3.4      3.1     1.2     1.0      0.8
Net amortization costs and other  0.1     0.2      0.1       -     0.1        -
Less expected return on assets.. (5.2)   (5.0)    (4.7)   (0.9)   (0.7)    (0.7)
                                 -----   -----    -----   ----    -----    -----
Net postretirement

     (income) expense           $(0.7)  $(0.7)   $(0.5)   $0.7   $ 0.7    $ 0.5
                                =====   =====    =====    ====   =====    =====

                                       27
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

10. POSTRETIREMENT BENEFITS (continued)


Postretirement Expense (continued)

         "Amortization  costs"  include  amortization  of  cumulative  gains and
losses over the expected remaining service life of employees and amortization of
the  initial  transition  liability  over  15  years  and  amortization  of plan
amendments.  Plan amendments are recognized  over the remaining  service life of
employees.

         The funded status of the Corporation's plans as of October 31, 2000 and
1999  and  a  reconciliation  with  amounts  recognized  in  the  Statements  of
Consolidated Financial Condition are as follows:

<TABLE>
<CAPTION>
                                           Pension Benefits                   Other Benefits

<S>                                      <C>          <C>                   <C>          <C>
                                         2000         1999                  2000         1999
--------------------------------------------------------------------------------------------------
Change in benefit obligation
----------------------------
Benefit obligation at beginning
   of year                               $48.5        $51.5                 $14.9        $14.0
Service cost                               0.7          0.7                   0.4          0.3
Interest on obligation..............       3.7          3.4                   1.2          1.0
Curtailment                                0.2            -                   1.0            -
Actuarial net loss (gain)...........       0.1         (4.4)                  4.0            -
Benefits paid                             (2.9)        (2.7)                 (0.5)        (0.4)
                                         -----        -----                 -----        -----
Benefit obligation at end of year...     $50.3        $48.5                 $21.0        $14.9
                                         =====        =====                 =====        =====

Change in plan asset
Fair value of plan assets at
   beginning of year................     $53.9        $53.0                 $ 7.8        $ 6.7
Actual return on plan assets........       4.9          3.4                   0.2          1.1
Employer contribution...............         -            -                   0.3          0.3
Benefits paid                             (2.6)        (2.5)                 (0.3)        (0.3)
                                         -----        -----                 ------       -----
Fair value of plan assets at
   year-end                              $56.2        $53.9                 $ 8.0        $ 7.8
                                         =====        =====                 =====        =====
Funded status                            $ 5.9        $ 5.4                $(13.0)       $(7.0)
Unrecognized actuarial net

   (gain) loss......................      (3.9)        (4.0)                  6.7          2.2
Unrecognized transition amount......       0.1          0.1                     -            -
Unrecognized prior service cost.....       0.6          0.4                     -            -
                                         -----        -----                  -----        -----
Net amount recognized...............     $ 2.7        $ 1.9                 $(6.3)       $(4.8)
                                         =====        =====                  =====        =====

Amounts recognized in the
   Statements of Consolidated
   Financial Condition
   consists of:

      Prepaid benefit cost..........     $ 4.6        $ 3.5                  $  -         $  -
      Accrued benefit liability.....      (4.3)        (3.5)                 (6.3)        (4.8)
      Intangible asset..............         -            -                     -            -
      Accumulated reduction in
         shareowner's equity........       2.4          1.9                     -            -
                                         -----        -----                  -----        -----
            Net amount recognized...     $ 2.7        $ 1.9                 $(6.3)       $(4.8)
                                         =====        =====                  =====        =====
</TABLE>

                                       28
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

10. POSTRETIREMENT BENEFITS (continued)

Postretirement Expense (continued)

         The  accumulated  reduction in  shareowner's  equity is recorded in the
Statements of Consolidated  Financial  Condition net of deferred income taxes of
$0.9 at October 31, 2000.

         The sale of Harco resulted in a curtailment loss of approximately $1.2,
which is recorded as a part of the loss on disposal of  discontinued  operations
in the Statements of Consolidated Income.

         The projected benefit  obligation,  accumulated  benefit obligation and
fair  value  of plan  assets  for the  pension  plan  with  accumulated  benefit
obligations in excess of plan assets were $4.1, $4.1, and $0.0, respectively, as
of October 31, 2000, and $3.5, $3.5, and $0.0,  respectively,  as of October 31,
1999.

         The weighted average rate assumptions used in determining  expenses and
benefit obligations were:

<TABLE>
<CAPTION>
                                            Pension Benefits                     Other Benefits


<S>                                     <C>        <C>       <C>            <C>       <C>          <C>
                                        2000       1999      1998           2000      1999         1998

Discount rate used to determine
   present value of benefit
   obligation at year-end.............. 8.0%       7.8%       6.7%           8.2%      8.0%        7.1%
Expected long-term rate of
   return on plan asset for
   the year                             9.8%       9.6%       9.6%          11.0%     10.8%       10.8%
Expected rate of increase in
   future compensation levels.......... 3.5%       3.5%       3.5%           N/A       N/A         N/A

</TABLE>

         For 2000, the weighted  average rate of increase in the per capita cost
of covered health care benefits is projected to be 10.3%.  The rate is projected
to  decrease  to 5.0% by the year  2006  and  remain  at that  level  each  year
thereafter.  The  effect of  changing  the  health  care cost  trend  rate is as
follows:

                                                 1-Percentage-    1-Percentage-
                                                 Point Increase   Point Decrease
--------------------------------------------------------------------------------

 Effect on total of service and interest cost
    components..................................      $0.4            $(0.3)
 Effect on postretirement benefit obligation....       3.2             (2.6)


                                       29
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

11. LEASES

         The Corporation is obligated under non-cancelable  operating leases for
the majority of its office facilities.  These leases are generally renewable and
provide that property taxes and maintenance  costs are to be paid by the lessee.
At October 31, 2000,  future  minimum  lease  commitments  under  non-cancelable
operating leases with remaining terms in excess of one year are as follows:

       Year Ended October 31,

       2001.................................................$ 1.6
       2002.................................................  1.3
       2003.................................................  1.3
       2004.................................................  1.3
       2005.................................................  1.2
       Thereafter...........................................  1.0
                                                            -----
       Total................................................ $7.7
                                                             ====


12. SHAREOWNER'S EQUITY

         The number of authorized shares of capital stock as of October 31, 2000
and 1999, was 2,000,000 of which 1,600,000  shares were issued and  outstanding.
All of the issued and outstanding capital stock is owned by International and no
shares are  reserved  for officers  and  employees,  or for  options,  warrants,
conversions and other rights.

         The components of accumulated other comprehensive income (loss), net of
taxes, are as follows:


<TABLE>
<CAPTION>

                                                     Net Unrealized       Minimum      Accumulated Other
                                                     Gains (Losses)       Pension        Comprehensive
                                                     On Securities       Liability       Income (Loss)
------------------------------------------------------------------------------------------------------------

<S>                                                       <C>                <C>                <C>
Balance at October 31, 1997..........................   $ 3.7              $   -              $ 3.7
     Change in 1998..................................    (1.2)              (1.0)              (2.2)
                                                         -----              -----              -----
Balance at October 31, 1998..........................     2.5               (1.0)               1.5
     Change in 1999..................................    (3.2)              (0.2)              (3.4)
                                                         -----              -----              -----
Balance at October 31, 1999..........................    (0.7)              (1.2)              (1.9)
     Change in 2000..................................     -                 (0.3)              (0.3)
     Reclass to loss on disposal of
         Discontinued Operations.....................     0.7                  -                0.7
                                                         ----              -----              -----
Balance at October 31, 2000..........................    $0.0              $(1.5)             $(1.5)
                                                         ====               =====              =====
</TABLE>
                                       30
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

13. FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

         The carrying  amounts and  estimated  fair values of the  Corporation's
financial instruments were as follows:

<TABLE>
<CAPTION>
                                                     2000                        1999
                                              Carrying      Fair         Carrying       Fair
                                                Value       Value          Value        Value
----------------------------------------------------------------------------------------------
<S>                                              <C>          <C>            <C>          <C>
Financial assets:
     Finance receivables:
         Retail notes....................... $ 1,050.5    $ 1,036.6       $  851.9    $  858.6
         Wholesale notes and accounts.......     404.8        404.8        1,036.2     1,036.2
     Amounts due from sales of
         Receivables........................     316.5        311.8          244.5       242.5

Financial liabilities:
     Senior and subordinated debt,
         excluding capital lease
         obligations........................   1,495.0      1,494.9        1,352.7     1,353.7
</TABLE>

         The  carrying  amount of cash and cash  equivalents  approximates  fair
value.

         The fair value of retail notes is estimated by  discounting  the future
contractual cash flows using an estimated discount rate reflecting current rates
paid to purchasers of similar types of receivables with similar credit, interest
rate and  prepayment  risks.  For  wholesale  notes  and  retail  and  wholesale
accounts,  all of which reprice monthly,  the carrying amounts  approximate fair
value as a result of the short-term nature of the receivables.

         The fair value of cash  deposits  included  above in  amounts  due from
sales of receivables approximates their carrying value. The fair values of other
amounts due from sales of receivables were derived by discounting  expected cash
flows at estimated current market rates.

         For fixed rate debt, the fair value is estimated based on quoted market
prices where available and, where not available, on quoted market prices of debt
with similar characteristics.

         The  estimated  fair  values  for  all  other   financial   instruments
approximate  their  carrying  values due to the  short-term  nature or  variable
interest terms inherent in the financial instruments.


                                       31
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

13. FINANCIAL INSTRUMENTS (continued)


Derivatives Held or Issued for Purposes Other Than Trading

         The Corporation  manages its exposure to fluctuations in interest rates
by limiting  the amount of fixed rate  assets  funded  with  variable  rate debt
generally  by  selling  fixed  rate  receivables  on a fixed  rate  basis and by
utilizing   derivative   financial   instruments.   These  derivative  financial
instruments may include forward contracts, interest rate swaps and interest rate
caps. The fair value of these  instruments  is estimated  based on quoted market
prices and is subject to market risk as the instruments may become less valuable
due to changes in market  conditions or interest rates. The Corporation  manages
exposure to  counter-party  credit risk by entering  into  derivative  financial
instruments  with major  financial  institutions  that can be  expected to fully
perform under the terms of such  agreements.  The  Corporation  does not require
collateral or other security to support  derivative  financial  instruments with
credit risk. The Corporation's  counter-party  credit exposure is limited to the
fair value of contracts  with a positive  fair value at the  reporting  date. At
October 31, 2000,  the  Corporation's  derivative  financial  instruments  had a
negative  net fair  value.  Notional  amounts  are used to measure the volume of
derivative financial instruments and do not represent exposure to credit loss.

         The Corporation enters into derivative financial  instruments to manage
its exposure to fluctuations in the fair value of retail notes anticipated to be
sold. The  Corporation  manages such risk by entering into forward  contracts to
sell fixed debt  securities  or forward  interest rate swaps whose fair value is
highly correlated with that of the Corporation's receivables. Income recognition
of changes in the fair value of the derivatives is deferred until the derivative
instruments  are  closed.  Gains or losses  incurred  with the  closing of these
agreements  are  included  as a  component  of the  gain  or  loss  on  sale  of
receivables.  As of October 31, 2000,  there were no such  derivative  financial
instruments open.

         In November 1998, the Corporation sold fixed rate retail receivables to
a  multi-seller  asset-backed  commercial  paper  conduit  sponsored  by a major
financial institution on a variable rate basis. For the protection of investors,
the  Corporation  issued an interest  rate cap. The  notional  amount of the cap
amortizes based on the expected outstanding principal balance of the sold retail
receivables.  Under the terms of the cap agreement,  the  Corporation  will make
payments if interest rates exceed certain levels. As of October 31, 2000 the cap
had a notional amount of $224 and a fair value of $1, which is recorded in other
liabilities in the Statement of Consolidated Financial Condition.


                                       32
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

13. FINANCIAL INSTRUMENTS (continued)


         In November 1999, the Corporation sold fixed rate retail receivables on
a  variable  rate  basis  and  entered  into an  amortizing  interest  rate swap
agreement  to fix the future  cash flows of interest  paid to lenders.  In March
2000, the Corporation  transferred all the rights and obligations of the swap to
the bank conduit.  The notional  amount of the  amortizing  swap is based on the
expected outstanding principal balance of the sold retail receivables. Under the
terms of the agreement,  the Corporation  will make or receive payments based on
the   differential   between  the  transferred  swap  notional  amount  and  the
outstanding principal balance of the sold retail receivables. The net settlement
is included in retail  notes  revenue.  As of October 31, 2000 the  differential
between the amortizing swap notional  amount and the net  outstanding  principal
balance of the sold retail receivables was $11 and had an immaterial fair value.

         In October 2000, the Corporation  entered into a $500 retail  revolving
facility as a method to fund retail  notes and finance  leases prior to the sale
of receivables.  Under the agreements of this facility,  the  Corporation  sells
fixed rate retail  notes or finance  leases to the conduit and pays  investors a
floating rate of interest.  As required by the rating agencies,  the Corporation
purchased an interest  rate cap to protect  investors  against  rising  interest
rates.  To  offset  the  economic  cost of this  cap,  the  Corporation  sold an
identical  interest rate cap. As of October 31, 2000 the interest rate caps each
had a notional amount of $500 and a net fair value of zero.


14. LEGAL PROCEEDINGS

         The  Corporation  is subject to various  claims arising in the ordinary
course of business,  and is party to various legal  proceedings which constitute
ordinary routine  litigation  incidental to the business of the Corporation.  In
the opinion of the Corporation's management, none of these proceedings or claims
are material to the business or the financial condition of the Corporation.


15. SUBSEQUENT EVENTS

         In November 2000, the Corporation  sold $764.7 of retail notes,  net of
unearned finance income,  through NFRRC to an owner trust which, in turn, issued
securities which were sold to investors.  A $4.8 gain was recognized in November
2000.

         In November 2000, the Corporation  established Truck Engine Receivables
Financing Corporation ("TERFCO"), a special purpose,  wholly-owned subsidiary of
the Corporation,  for the purpose of securitizing engine accounts receivable. On
November  21, 2000,  the  Corporation  securitized  all of its  unsecured  trade
receivables  generated by the sale of diesel  engines and engine  service  parts
from International to Ford. The transaction provides for funding of $100 million
and expires in 2006.


                                       33
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               MILLIONS OF DOLLARS

16. QUARTERLY FINANCIAL INFORMATION  (unaudited)

<TABLE>
<CAPTION>
                                                           2000

                                     --------- --------- --------- --------- --------
                                        1st       2nd       3rd       4th     Fiscal
                                      Quarter   Quarter   Quarter   Quarter    Year
---------------------------------------------- --------- --------- --------- --------

Results of Continuing Operations

<S>                                     <C>       <C>       <C>       <C>     <C>
    Revenues.........................   $75.7     $74.3     $78.0     $83.4   $311.4
    Interest expense.................    24.0      23.0      26.8      30.3    104.1
    Provision for losses

       on receivables................     1.4       2.3       3.0       5.4     12.1
Income from Continuing

    Operations.......................    16.0      14.1      14.2      12.1     56.4
Income (loss) from Discontinued

    Operations.......................     1.2       0.1         -      (0.8)     0.5
Loss on Disposal of

    Discontinued Operations..........       -         -         -     (10.5)   (10.5)
Net income...........................    17.2      14.2      14.2       0.8     46.4

                                                           1999

                                     --------- --------- --------- --------- --------
                                        1st       2nd       3rd       4th     Fiscal
                                      Quarter   Quarter   Quarter   Quarter    Year
---------------------------------------------- --------- --------- --------- --------

Results of Continuing Operations

    Revenues.........................   $68.8     $68.3     $73.9     $72.9   $283.9
    Interest expense.................    22.2      21.5      20.6      24.3     88.6
    Provision for losses
       on receivables................     1.3       1.9       1.3       1.7      6.2
Income from Continuing

    Operations.......................    14.4      13.9      16.8      14.2     59.3
Income from Discontinued
    Operations.......................     0.1       1.1       0.9       1.1      3.2
Net income...........................    14.5      15.0      17.7      15.3     62.5

</TABLE>
                                       34
<PAGE>

                 Navistar Financial Corporation and Subsidiaries
                 Statement of Financial Reporting Responsibility



          Management of Navistar  Financial  Corporation and its subsidiaries is
    responsible for the preparation and for the integrity and objectivity of the
    accompanying  financial  statements and other financial  information in this
    report.  The financial  statements  have been  prepared in  accordance  with
    accounting principles generally accepted in the United States of America and
    include amounts that are based on management's estimates and judgments.

          The accompanying  financial statements have been audited by Deloitte &
    Touche LLP, independent auditors.  Management has made available to Deloitte
    & Touche LLP all the  Corporation's  financial  records and related data, as
    well as the minutes of  Directors'  meetings.  Management  believes that all
    representations  made to  Deloitte  & Touche LLP during its audit were valid
    and appropriate.

          Management is responsible for establishing and maintaining a system of
    internal  controls   throughout  its  operations  that  provides  reasonable
    assurance as to the integrity and  reliability of the financial  statements,
    the  protection  of  assets  from  unauthorized  use and the  execution  and
    recording of transactions in accordance with management's authorization. The
    system of internal  controls  which  provides  for  appropriate  division of
    responsibility  is supported by written  policies  and  procedures  that are
    updated by  management  as  necessary.  The  system is tested and  evaluated
    regularly  by the  parent  Company's  internal  auditors  as  well as by the
    independent  auditors in connection with their annual audit of the financial
    statements.  The independent auditors conduct their audit in accordance with
    auditing  standards  generally  accepted in the United States of America and
    perform  such tests of  transactions  and  balances as they deem  necessary.
    Management  considers  the  recommendations  of its  internal  auditors  and
    independent   auditors  concerning  the  Corporation's  system  of  internal
    controls  and takes the  necessary  actions that are  cost-effective  in the
    circumstances  to respond  appropriately to the  recommendations  presented.
    Management  believes  that the  Corporation's  system of  internal  controls
    accomplishes  the  objectives  set  forth  in the  first  sentence  of  this
    paragraph.

    John J. Bongiorno
    President and Chief Executive Officer

    Ronald D. Markle
    Vice President and Controller


                                       35
<PAGE>

                 Navistar Financial Corporation and Subsidiaries
                          Independent Auditors' Report


    Navistar Financial Corporation:

    We have  audited  the  accompanying  consolidated  financial  statements  of
    Navistar  Financial  Corporation and its subsidiaries as of October 31, 2000
    and 1999 and for each of the three  years in the period  ended  October  31,
    2000,  listed in Item 8. These  consolidated  financial  statements  are the
    responsibility of the  Corporation's  management.  Our  responsibility is to
    express an opinion on these consolidated  financial  statements based on our
    audits.

    We conducted our audits in  accordance  with  auditing  standards  generally
    accepted in the United States of America.  Those  standards  require that we
    plan and perform the audit to obtain reasonable  assurance about whether the
    financial  statements are free of material  misstatement.  An audit includes
    examining,  on a test basis, evidence supporting the amounts and disclosures
    in the financial statements. An audit also includes assessing the accounting
    principles  used and  significant  estimates made by management,  as well as
    evaluating the overall financial statement presentation. We believe that our
    audits provide a reasonable basis for our opinion.

    In our opinion, the accompanying  consolidated  financial statements present
    fairly,  in all  material  respects,  the  financial  position  of  Navistar
    Financial  Corporation and its  subsidiaries as of October 31, 2000 and 1999
    and the  results  of their  operations  and their  cash flow for each of the
    three  years  in the  period  ended  October  31,  2000 in  conformity  with
    accounting principles generally accepted in the United States of America.

    /s/DELOITTE & TOUCHE LLP
       Deloitte & Touche LLP
       December 11, 2000
       Chicago, Illinois


                                       36
<PAGE>



                          SUPPLEMENTARY FINANCIAL DATA

                Five Year Summary of Financial and Operating Data

                           Dollar amounts in millions

<TABLE>
<CAPTION>
                                              2000          1999           1998           1997           1996
----------------------------------------------------------------------------------------------------------------
Results of Continuing
 Operations:

<S>                                            <C>           <C>            <C>            <C>            <C>
     Revenues...........................   $  311.4      $  283.9       $  234.3       $  193.5       $  201.6
     Net income ........................       56.4          59.3           48.9           41.8           45.3
     Dividends paid ....................       22.7          60.3           57.0           40.0           26.0

     Percent of net income to
         average shareowner's

         Equity.........................      18.9%         21.0%          17.1%          14.7%          16.6%

 Financial Data:

     Finance receivables, net ..........   $1,666.1      $2,062.5       $1,510.9       $1,211.2       $1,193.6
     Total assets ......................    2,518.9       2,769.9        2,127.8        1,719.4        1,685.0

     Total debt ........................    1,874.0       1,710.3        1,633.0        1,223.7        1,305.8
     Shareowner's equity ...............      304.4         280.3          281.5          287.8          279.7

     Debt to equity ratio ..............      6.2:1         6.1:1          5.8:1          4.3:1          4.7:1
     Senior debt to capital
         funds ratio....................      4.4:1         4.2:1          3.1:1          2.1:1          3.2:1


 Number of employees at
     October 31.........................        291           307            300            270            264


Results of Discontinued
 Operations:

     Revenues...........................    $  55.9       $  44.2        $  41.6        $  41.4        $  51.2
     Net income ........................        0.5           3.2            4.0            3.9            4.1

 Number of employees at
     October 31.........................         94            92             94             88             88
</TABLE>

                                       37
<PAGE>


                    SUPPLEMENTARY FINANCIAL DATA (Continued)

Gross Finance Receivables and Leases Acquired
<TABLE>
<CAPTION>

($ Millions)                                  2000          1999          1998            1997           1996
--------------------------------------------------------------------------------------------------------------

<S>                                         <C>          <C>            <C>            <C>            <C>
Wholesale notes..........................   4,119.3      $4,188.5       $3,812.8       $2,772.8       $2,705.8

Retail notes and leases:
     New                                    1,561.4       1,519.7        1,358.0          976.2        1,064.1
     Used ...............................     268.6         286.4          309.2          270.3          281.7
                                           --------      --------       --------       --------       --------
         Total...........................   1,830.0       1,806.1        1,667.2        1,246.5        1,345.8
                                           --------      --------       --------       --------       --------

     Total ..............................  $5,949.3      $5,994.6       $5,480.0       $4,019.3       $4,051.6
                                           ========      ========       ========       ========       ========
</TABLE>




Serviced (including sold notes) Retail Notes and
Leases With Installments Past Due Over 60 Days

<TABLE>
<CAPTION>

At October 31 ($ Millions)                   2000            1999          1998           1997          1996
--------------------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>           <C>            <C>           <C>
Original amount of notes
     and leases..........................   $ 91.7          $ 40.4        $ 33.6         $ 31.8        $ 14.0
Balance of notes and leases..............     46.3            17.9          16.5           16.2           8.0
Balance as a percent of
     total outstanding...................     1.26%           0.53%         0.57%          0.64%         0.32%
</TABLE>




Retail Note and Lease Repossessions (including sold notes)
<TABLE>
<CAPTION>

                                             2000            1999           1998           1997           1996
----------------------------------------------------------------------------------------------------------------
<S>                                          <C>              <C>           <C>             <C>            <C>
Retail note and lease
     repossessions acquired as
     a percentage of average
     serviced retail note and
     lease balances......................     2.80%           1.82%         2.26%          2.69%         3.08%

</TABLE>

                                       38
<PAGE>


                    SUPPLEMENTARY FINANCIAL DATA (Continued)

Credit Loss Experience on Serviced (including sold notes) Receivables
<TABLE>
<CAPTION>

($ Millions)                                 2000           1999          1998         1997         1996
---------------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>            <C>          <C>          <C>
Net losses (recoveries):
     Retail notes and leases ............     $12.2         $5.5          $ .2         $2.2         $5.1
     Wholesale notes ....................         -          (.2)          (.3)         (.2)         (.2)
     Accounts                                   (.1)          .1             -            -            -
                                               -----        ----           ----        ----         ----
         Total ..........................     $12.1         $5.4          $(.1)        $2.0         $4.9
                                              =====         ====           ====        ====         ====


Percent net losses (recoveries) to liquidations:

     Retail notes and leases ............     .82%         .41%          .02%         .18%          .48%
     Wholesale notes ....................       -            -          (.01)        (.01)         (.01)
         Total ..........................     .21%         .10%            -          .05%          .13%


Percent  net  losses   (recoveries)   to  related   average  gross   receivables
   outstanding:

     Retail notes and leases ............     .36%         .18%          .01%         .09%          .22%
     Wholesale notes ....................    (.02)        (.02)         (.04)        (.02)         (.02)
     Accounts                                (.02)         .02             -            -             -
         Total ..........................     .30%         .12%            -          .06%          .14%

</TABLE>
                                       39
<PAGE>


Item 9.  Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

          None

                                    PART III

Items 10, 11, 12 and 13

          Intentionally   omitted.  See  the  index  page  of  this  Report  for
explanation.


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
Financial Statements

          See Index to Financial Statements in Item 8.


    Financial Statement Schedules

          All  schedules  are omitted  because of the absence of the  conditions
    under which they are required or because  information called for is shown in
    the financial statements and notes thereto.


    Exhibits, Including Those Incorporated By Reference

          See Index to Exhibits.


    Reports on Form 8-K

          No reports on Form 8-K were filed for the three months  ended  October
    31, 2000.


                                       40
<PAGE>
                                    SIGNATURE


         Pursuant to the  requirements of Section 13 or 15(d) of the Securities
    Exchange  Act of 1934,  the  registrant  has duly  caused  this report to be
    signed on its behalf by the undersigned, thereunto duly authorized.

                         NAVISTAR FINANCIAL CORPORATION
                                  (Registrant)




    By:   /s/Ronald D. Markle                                  December 19, 2000
          -------------------------------
               Ronald D. Markle
               Vice President and Controller
               (Principal Accounting Officer)


                                       41
<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                POWER OF ATTORNEY

      Each person whose signature appears below does hereby make, constitute and
appoint John J. Bongiorno, Ronald D. Markle and Steven K. Covey and each of them
acting individually,  true and lawful attorneys-in-fact and agents with power to
act without the other and with full power of substitution,  to execute,  deliver
and  file,  for and on such  person's  behalf,  and in such  person's  name  and
capacity or capacities as stated below, any amendment,  exhibit or supplement to
the Form 10-K Report making such changes in the report as such  attorney-in-fact
deems appropriate.

                                   SIGNATURES

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated:

      Signature                       Title                          Date

/s/JOHN J. BONGIORNO       President and Chief Executive       December 19, 2000
--------------------       Officer; Director
                           (Principal Executive Officer)
   John J. Bongiorno

/s/R. WAYNE CAIN           Vice President and Treasurer;       December 19, 2000
--------------------       Director
                           (Principal Financial Officer)
   R. Wayne Cain

/s/RONALD D. MARKLE        Vice President and Controller;      December 19, 2000
-----------------------    Director
                           (Principal Accounting Officer)
   Ronald D. Markle

/s/PHYLLIS E. COCHRAN      Vice President Operations;          December 19, 2000
----------------------     Director
   Phyllis E. Cochran


/s/JOHN R. HORNE           Director                            December 19, 2000
--------------------
   John R. Horne

/s/THOMAS M. HOUGH        Director                             December 19, 2000
--------------------
   Thomas M. Hough


                                       42
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES



                             SIGNATURES (Continued)

       Signature                     Title                        Date

/s/ROBERT C. LANNERT                 Director               December 19, 2000
-----------------------
   Robert C. Lannert

/s/MARK SCHWETSCHENAU                Director               December 19, 2000
-------------------------
   Mark Schwetschenau

/s/THOMAS D. SILVER                  Director               December 19, 2000
-----------------------
   Thomas D. Silver


                                       43
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS

      The following documents of Navistar Financial Corporation are incorporated
herein by reference:

3.1  Restated Certificate of Incorporation of Navistar Financial Corporation (as
     amended  and in  effect  on  December  15,  1987).  Filed on Form 8-K dated
     December 17, 1987. Commission File No. 1-4146-l.

3.2  The By-Laws of Navistar  Financial  Corporation  (as amended  February  29,
     1988).  Filed on Form 10-K dated  January  19,  1989.  Commission  File No.
     1-4146-1.

4.1  Indenture  dated as of May 30, 1997 by and between the  Corporation and The
     Fuji Bank and Trust Company,  as Trustee,  for 9% Senior Subordinated Notes
     due 2002 for $100,000,000. Filed on Registration No. 333-30167.

10.1 Master  Inter-company  Agreement  dated as of April 26,  1993,  between the
     Corporation  and  International.  Filed on Form 8-K dated  April 30,  1993.
     Commission File No. 1-4146-1.

10.2 Inter-company  Purchase  Agreement dated as of April 26, 1993,  between the
     Corporation and Truck Retail Instalment Paper Corp. Filed on Form 8-K dated
     April 30, 1993. Commission File No. 1-4146-1.

10.3 Amended and Restated Credit  Agreement dated as of November 4, 1994,  among
     the  Corporation,  certain banks,  certain  Co-Arranger  banks,  and Morgan
     Guaranty Trust Company of New York, as Administrative  Agent. Filed on Form
     8-K dated November 4, 1994. Commission File No. 1-4146-1.

10.4 Servicing  Agreement dated as of November 7, 1994, between the Corporation,
     as Servicer,  and Truck  Retail  Instalment  Paper Corp.  Filed on Form 8-K
     dated November 4, 1994. Commission File No. 1-4146-1.


10.5 Retail Receivables Purchase Agreement dated as of November 7, 1994, between
     Truck Retail Instalment Paper Corp. and the Corporation.  Filed on Form 8-K
     dated November 4, 1994. Commission File No. 1-4146-1.

10.6 Lease Receivables  Purchase Agreement dated as of November 7, 1994, between
     Truck Retail Instalment Paper Corp. and Navistar Leasing Corporation. Filed
     on Form 8-K dated November 4, 1994. Commission File No. 1-4146-1.


                                       E-1
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS

10.7 Pooling and Servicing  Agreement  dated as of June 8, 1995,  among Navistar
     Financial   Corporation,   as  Servicer,   Navistar  Financial   Securities
     Corporation,  as Seller,  The Chase  Manhattan Bank (survivor in the merger
     between The Chase  Manhattan  Bank and Chemical Bank which was the survivor
     in the  merger  between  Chemical  Bank  and  Manufacturers  Hanover  Trust
     Company),  as 1990 Trust Trustee, and The Bank of New York, as Master Trust
     Trustee. Filed on Registration No. 33-87374.

10.8 Series 1995-1 Supplement to the Pooling and Servicing Agreement dated as of
     June 8,  1995,  among the  Corporation,  as  Servicer,  Navistar  Financial
     Securities  Corporation,  as  Seller,  and The Bank of New York,  as Master
     Trust Trustee on behalf of the Series 1995-1  Certificateholders.  Filed on
     Registration No. 33-87374.

10.9 Purchase  Agreement  dated as of June 8, 1995,  between the Corporation and
     Navistar Financial Securities  Corporation,  as Purchaser,  with respect to
     the Dealer Note Master Trust. Filed on Registration No. 33-87374.

10.10Amendment  No. 2 dated as of March 29,  1996,  to the Amended and  Restated
     Credit  Agreement dated as of November 4, 1994, as amended by Amendment No.
     1 dated as of December  15, 1995,  among the  Corporation,  certain  banks,
     certain  Co-Arranger  banks, and Morgan Guaranty Trust Company of New York,
     as  Administrative  Agent filed on Form 8-K dated June 5, 1996.  Commission
     File No. 1-4146-1.

10.11Purchase  Agreement  dated as of May 30, 1996,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar Financial 1996-A Owner Trust. Filed on Registration No.
     33-55865.

10.12Pooling  and  Servicing  Agreement  dated  as of May 30,  1996,  among  the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  1996-A  Owner Trust,  as
     Issuer. Filed on Registration No. 33-55865.

10.13Trust  Agreement  dated  as of May 30,  1996,  between  Navistar  Financial
     Retail Receivables  Corporation,  as Seller, and Chemical Bank Delaware, as
     Owner Trustee, with respect to Navistar Financial 1996-A Owner Trust. Filed
     on Registration No. 33-55865.


                                       E-2
<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS

10.14Indenture  dated as of May 30,  1996,  between  Navistar  Financial  1996-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 1996-A Owner Trust. Filed on Registration No. 33-55865.

10.15Purchase  Agreement  dated as of November 6, 1996,  between the Corporation
     and Navistar Financial Retail Receivables Corporation,  as Purchaser,  with
     respect to Navistar Financial 1996-B Owner Trust. Filed on Registration No.
     33-55865.

10.16Pooling and  Servicing  Agreement  dated as of November 6, 1996,  among the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  1996-B  Owner Trust,  as
     Issuer. Filed on Registration No. 33-55865.

10.17Trust Agreement dated as of November 6, 1996,  between  Navistar  Financial
     Retail Receivables  Corporation,  as Seller, and Chemical Bank Delaware, as
     Owner Trustee, with respect to Navistar Financial 1996-B Owner Trust. Filed
     on Registration No. 33-55865.

10.18Indenture dated as of November 6, 1996,  between Navistar  Financial 1996-B
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 1996-B Owner Trust. Filed on Registration No. 33-55865.

10.19Purchase  Agreement  dated as of May 7, 1997,  between the  Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  1997-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 33-55865.

10.20Pooling  and  Servicing  Agreement  dated  as of May  7,  1997,  among  the
     Corporation as Servicer, Navistar Financial Retail Receivables Corporation,
     as Seller, and Navistar  Financial 1997-A Owner Trust, as Issuer.  Filed on
     Registration No. 33-55865.

10.21Trust Agreement dated as of May 7, 1997,  between Navistar Financial Retail
     Receivables  Corporation,  as Seller, and Chase Manhattan Bank Delaware, as
     Owner Trustee, with respect to Navistar Financial 1997-A Owner Trust. Filed
     on Registration No. 33-55865.

10.22Indenture dated as of May 7, 1997,  between Navistar Financial 1997-A Owner
     Trust and The Bank of New York,  as  Indenture  Trustee,  with  respect  to
     Navistar Financial 1997-A Owner Trust. Filed on Registration No. 33-55865.


                                       E-3


<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS

10.23Amendment  No. 3 dated as of May 27,  1997,  to the  Amended  and  Restated
     Credit  Agreement dated as of November 4, 1994, as amended by Amendment No.
     1 dated as of December 15, 1995 and  Amendment  No. 2 dated as of March 29,
     1996, among the Corporation,  certain banks, certain Co-Arranger banks, and
     Morgan Guaranty Trust Company of New York, as Administrative Agent filed on
     Form 8-K dated June 17, 1997. Commission File No. 1-4146-1.

10.24Series 1997-1  Supplement to the Pooling and Servicing  Agreement  dated as
     of August 19, 1997,  among  Navistar  Financial  Corporation,  as Servicer,
     Navistar Financial Securities  Corporation,  as Seller, and the Bank of New
     York,   as  Master   Trust   Trustee  on  behalf  of  the   Series   1997-1
     Certificateholders. Filed on Registration No. 333-30737.

10.25Purchase  Agreement  dated as of November 5, 1997,  between the Corporation
     and Navistar Financial Retail Receivables Corporation,  as Purchaser,  with
     respect to Navistar  Financial  1997-B  Owner  Trust,  as Issuer.  Filed on
     Registration No. 33-64249.

10.26Pooling and  Servicing  Agreement  dated as of November 5, 1997,  among the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  1997-B  Owner Trust,  as
     Issuer. Filed on Registration No. 33-64249.

10.27Trust Agreement dated as of November 5, 1997,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 1997-B Owner
     Trust. Filed on Registration No. 33-64249.

10.28Indenture dated as of November 5, 1997,  between Navistar  Financial 1997-B
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 1997-B Owner Trust. Filed on Registration No. 33-64249.

10.29Series 1998-1  Supplement to the Pooling and Servicing  Agreement  dated as
     of July 17,  1997,  among  Navistar  Financial  Corporation,  as  Servicer,
     Navistar Financial Securities  Corporation,  as Seller, and the Bank of New
     York,   as  Master   Trust   Trustee  on  behalf  of  the   Series   1998-1
     Certificateholders. Filed on Registration No. 333-30737.

10.30Purchase  Agreement  dated as of June 4, 1998,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  1998-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 33-64249.


                                       E-4

<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS

10.31Pooling  and  Servicing  Agreement  dated  as of June 4,  1998,  among  the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  1998-A  Owner Trust,  as
     Issuer. Filed on Registration No. 33-64249.

10.32Trust  Agreement  dated  as of June 4,  1998,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 1998-A Owner
     Trust. Filed on Registration No. 33-64249.

10.33Indenture  dated as of June 4,  1998,  between  Navistar  Financial  1998-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 1998-A Owner Trust. Filed on Registration No. 33-64249.

10.34Purchase  Agreement dated as of November 13, 1998,  between the Corporation
     and Navistar Financial Retail Receivables Corporation,  as Purchaser,  with
     respect to Navistar Financial 1998-B Multi-seller  Asset-backed  Commercial
     Paper  Conduit,  as  Issuer.  Filed on Form 8-K dated  December  18,  1998.
     Commission File No. 33-64249.

10.35Transfer  and  Administration  Agreement  dated as of  November  13,  1998,
     between  the  Corporation,  as  Servicer,  and  Navistar  Financial  Retail
     Receivables   Corporation,   as   Transferor,   Park   Avenue   Receivables
     Corporation,  as Purchaser,  and The Chase Manhattan Bank, as Funding Agent
     and APA Bank.  Filed on Form 8-K dated December 18, 1998.  Commission  File
     No. 33-64249.

10.36Purchase  Agreement  dated as of June 3, 1999,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  1999-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 333-62445.

10.37Pooling  and  Servicing  Agreement  dated  as of June 3,  1999,  among  the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  1999-A  Owner Trust,  as
     Issuer. Filed on Registration No. 333-62445.

10.38Trust  Agreement  dated  as of June 3,  1999,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 1999-A Owner
     Trust. Filed on Registration No. 333-62445.

10.39Indenture  dated as of June 3,  1999,  between  Navistar  Financial  1999-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 1999-A Owner Trust. Filed on Registration No. 333-62445.


                                       E-5
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS

10.40Receivable  Purchase  Agreement  dated as of  November  12,  1999,  between
     Navistar   Financial  Retail  Receivables   Corporation,   as  Seller,  the
     Corporation,  as Servicer, and, Falcon Asset Securitization Corporation and
     International  Securitization Corporation, as investors, and Bank One NA as
     agent and as Securities  Intermediary,  with respect to Navistar  Financial
     1999-B  Multi-seller   Asset-backed  Commercial  Paper  Conduit.  Filed  on
     Registration No. 333-62445.

10.41Receivable Sale dated as of November 12, 1999,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar Financial 1999-B Multi-seller  Asset-backed  Commercial
     Paper Conduit, as Issuer. Filed on Registration No. 333-62445.

10.42Purchase  Agreement dated as of March 9, 2000,  between the Corporation and
     Navistar  Financial  Retail  Receivables  Corporation,  as Purchaser,  with
     respect to Navistar  Financial  2000-A  Owner  Trust,  as Issuer.  Filed on
     Registration No. 333-62445.

10.43Pooling  and  Servicing  Agreement  dated as of March 9,  2000,  among  the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  2000-A  Owner Trust,  as
     Issuer. Filed on Registration No. 333-62445.

10.44Trust  Agreement  dated as of March 9,  2000,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 2000-A Owner
     Trust. Filed on Registration No. 333-62445.

10.45Indenture  dated as of March 9, 2000,  between  Navistar  Financial  2000-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 2000-A Owner Trust. Filed on Registration No. 333-62445.

10.46Series 2000-1  Supplement to the Pooling and Servicing  Agreement  dated as
     of July 13,  2000,  among  Navistar  Financial  Corporation,  as  Servicer,
     Navistar Financial Securities  Corporation,  as Seller, and the Bank of New
     York,   as  Master   Trust   Trustee  on  behalf  of  the   Series   2000-1
     Certificateholders. Filed on Registration No. 333-32960.

10.47Purchase  Agreement  dated as of November 1, 2000,  between the Corporation
     and Navistar Financial Retail Receivables Corporation,  as Purchaser,  with
     respect to Navistar  Financial  2000-B  Owner  Trust,  as Issuer.  Filed on
     Registration No. 333-62445.


                                       E-6
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                INDEX TO EXHIBITS

10.48Pooling and  Servicing  Agreement  dated as of November 1, 2000,  among the
     Corporation,   as  Servicer,  and  Navistar  Financial  Retail  Receivables
     Corporation,  as Seller,  and Navistar  Financial  2000-B  Owner Trust,  as
     Issuer. Filed on Registration No. 333-62445.

10.49Trust Agreement dated as of November 1, 2000,  between  Navistar  Financial
     Retail  Receivables  Corporation,  as  Seller,  and  Chase  Manhattan  Bank
     Delaware, as Owner Trustee, with respect to Navistar Financial 2000-B Owner
     Trust. Filed on Registration No. 333-62445.

10.50Indenture dated as of November 1, 2000,  between Navistar  Financial 2000-A
     Owner Trust and The Bank of New York, as Indenture Trustee, with respect to
     Navistar Financial 2000-B Owner Trust. Filed on Registration No. 333-62445.

27.1 Financial  Data Schedule for Article 5 of  Regulation  S-X, Item 601(c) for
     the year ended October 31, 2000.


                                       E-7
<PAGE>